Owners rush to sell

A surge of home owners are putting up “for sale" signs around the country, hoping to offload their properties ahead of a paltry outlook for capital gains.

But while listings are increasing, prices are falling in all the state capitals, according to January figures from RP Data-Rismark. Notably prices in Sydney and Melbourne slumped for the first time since the financial crisis. Analysts say the added choice for buyers could further dilute demand in the months to come.

Up to the minute statistics by national real estate franchise Century21 showed the network had just under 2000 listings for sale nationwide yesterday, up from about 1600 at the end of November when stock levels were already high.

REA Group chief executive
Greg Ellis
said the company had a “suprising" spike in listings on its website realestate.com.au in the second half of February.

Demand has so far been good for those who listed their properties early. “Overall the market for February spiked and all offices are recording more buyer activity," said Century21 chairman Charles Tarbey. But he said sellers would need to set realistic prices. “There is still a need for sellers to compete on price and this will require discounting."

The past weekend was a big one for auctions in Sydney and Melbourne with more than 1500 properties offered, and about 65 per cent of properties sold on the day in both cities according to Australian Property Monitors. This was a higher proportion than the year end, which was closer to 50 per cent.

There are also signs of recovery in Brisbane, despite the natural disasters and poor performance for the rest of Queensland. Ray White chairman Brian White said he expected his company’s February numbers to be strong when they were tabulated later this week.

“Brisbane will be better than anyone could have anticipated a month ago," Mr White said. “There are big numbers at opens and auctions have got strong bidding."

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Melbourne buyer’s agent Mal James said crowds over 100 were common at auctions and there were big numbers through open houses. Bidders were driving up prices for some popular properties, such as a three-bedroom Edwardian terrace at 18 Jolimont Terrace, East Melbourne, which sold $700,000 above the reserve of $3 million on the weekend .

“It started stronger than it finished last year," Mr James said.

But he questioned how long the joy would last. “The jury is still out on the pre-Easter market... There’s a lot of stock out there and agents are certainly feeling very nervous," Mr James said.

On the opposite coast Perth was sluggish, with the second largest price slump of all the capitals according to RP Data-Rismark and weak demand. Graeme Baxter, managing director of the Acton Group of 17 offices said February sales showed little improvement. Auctions clearance rates nudged 70 per cent in February, but the values of the properties sold were down 9 per cent from the same time last year.

“Million dollar-plus sales were fairly quiet – there was a shift to the more $400,000 to $600,000 sales range," he said.

Macquarie real estate strategist Rod Cornish said a relatively stable interest rate outlook was probably the reason for better sentiment, but the fundamentals were not there for strong price growth.

“Affordability has reached a point where it’s going to slow things down," Mr Cornish said.